Question

Bridgeport Corp.closes its books on its July 31 year-end. The company does not make entries to accrue for interest except at its year-end. On June 30, the Notes Receivable account balance is $25,000 Notes Receivable include the following Maker Date Face Value Term Maturity Date Interest Rate April 21 Coote Inc. $4,000 90 days July 20 8% May 25 Brady Co. 9,000 60 days July 24 11% June 30 BMG Corp. 12,000 6 months December 31 6 % During July, the following transactions were completed July 5 Made sales of $4,380 on Bridgeport Corp. credit cards 14 Made sales of $400 on Visa credit cards. The credit card service charge is 3 % 20 Received payment in full from Coote Inc. on the amount due. 24 Received payment in full from Brady Co.on the amount due W

Answer 1

1.

Date	Account Titles	Debit	Credit
July 5	Accounts receivable	4380
	Sales revenue		4380
July 14	Cash	388
	Service charge expense	12
	Sales revenue		400
July 20	Cash	4080
	Notes receivable		4000
	Interest revenue [4000 *90/360*8%]		80
July 24	Cash	9165
	Notes receivable		9000
	Interest revenue [9000 *60/360*11%]		165
July 31	Interest receivable	60
	Interest revenue [12000 *1/12*6%]		60

2.

Notes receivable
July 1	25000	July 20	4000
		July 24	9000
July 31 [ bal. fig.]	12000

Accounts receivable
July 5	4380
July 31 [ bal. fig.]	4380

Interest receivable
July 31	60
July 31 (bal . Fig.)	60

3.

Balance Sheet
As at July 31 st
Receivables
Accounts receivable	4380
Notes receivable	12000
Interest receivable	60
Total receivables	16440